Nonprofit Directors & Officers Liability •PDF• •Print• •E-mail•

Directors & Officers/Employment Practices Liability

Dufour Insurance Services works closely with HR experts who can provide advice to our clients at no charge for tough employment questions. In addition, we always place D&O/EPLI coverage with carriers who offer free (800) HR support for questions related to best practices, claims prevention, and pre-termination consultation. Our goal is to prevent claims, protect your most important assets- your team, and preserve your limits and deductibles for true emergencies.

Directors & Officers Liability
An organization’s board of directors is liable for the management decisions they make, and can be named in a lawsuit individually. Types of claims include breach of contract, misallocation of assets, violation of bylaws, class action suits, and conflicts of interest, among others. Examples of claims:

$55,000 - A potential vendor alleged that bidding was rigged when they did not receive a contract for an annual fund raising event.

$100,000 (defense cost only) - Two years after 5 acres of property was donated to a foundation, the donor sought to revoke his donation. - The Insured had already begun to develop the property as a residence for disabled children. While the judge found in favor of the Insured, significant costs were incurred.

Employment Practices Liability
This insurance covers wrongful termination, harassment, age, racial, gender, religious, gender sexual discrimination, failure to train, failure to promote, and several other claim scenarios. A large percentage of claims against organizations are employment related. As businesses face difficult staff layoffs, they are confronted with unwarranted wrongful termination claims by disgruntled employees. Those claims, even if groundless, must still be defended and legal expenses are incurred. Whether your are a nonprofit or for-profit business, whether your staff is small and friendly or your office is large with it’s own HR manager, you’re vulnerable to such claims. Examples of claims:

$540,000 - An age discrimination lawsuit was brought by a highly paid 62 year old sales representative who was employed by the Insured. He was terminated for not meeting his sales quotas. Despite layoffs and cutbacks at the company, there was no documentation that showed the Plaintiff was a poor performer.

Third Party Liability
This coverage is an important and often overlooked/ ommitted coverage. When a client of a business feels that they have been discriminated against or harassed by an employee or volunteer of an organization, and they sue, this is considered a third party claim under the employment practices section of a D&O policy. Sample Third Party claim:

$206,000- A customer at a retail store sued for ethnic/racial discrimination after an employee was caught on surveillance tape dancing around the store with a towel on his head in the presence and sight of acustomer of Indian descent.